Which example best describes reducing risky behavior?

Stewart soaps began business by issuing 25,000 shares of $5 par value common stock for $20 per share. during its first year, the

larisa [96]

Issuing 25,000 shares of $5 par value common stock for $20 per share.

Cash (25,000 x 20) 500,000
Common stock (25,000 x 5) 125,000
Additional Paid-In Capital (25,000 x 15) 375,000

The net loss will only be reflected as a deduction from retained earnings. Retained earnings is where the net income or net loss of the company will be under in the year-end balance sheet. It is the balance of all income and loss the company has since its inception.

6 0

4 years ago

Which of the following is a criticism of the national income and product accounts?

jok3333 [9.3K]

I believe the correct answer among the choices is:

b) They do not capture most nonmarket economic activity

<span>The National Income and Product Accounts or NIPA is one of the main sources of the data on general economic activity in the United States. The greatest drawback to this is that it is only a prediction, it does not really reflect all the acitivities.</span>

4 0

4 years ago

In the past year, TVG had revenues of $2.95 million, cost of goods sold of $2.45 million, and depreciation expense of $178,000.

Firdavs [7]

Answer:

3.5

Explanation:

Computation for the firm’s times interest earned ratio

Revenues$ 2.95 million

Cost of goods sold$ 2.45 million

Depreciation expense$ 178,000.00

Book values of Debt outstanding$ 1.15 million

Interest rate8.00

First step is to calculate for the EBIT

Using this formula

EBIT= Revenues -(Cost of goods sold +Depreciation expense$ 178,000.00)

EBIT=$2,950,000-($2,450,000+$178,000)

EBIT=$2,950,000- $2,628,000

EBIT=$322,000

Second step is to find the Interest

Using this formula

Interest =Debt outstanding with book value ×Interest rate

Let plug in the formula

Interest =$1,150,000×8%

Interest =$92,000

Now let find the firm’s times interest earned ratio

Using this formula

Firm’s times interest earned ratio=EBIT/INTEREST

Where,

EBIT=$322,000

INTEREST=$92,000

Let plug in the formula

Firm’s times interest earned ratio=$322,000/$92,000

Firm’s times interest earned ratio =3.5

Therefore the firm’s times interest earned ratio will be 3.5

7 0

4 years ago

Donovan's would like to increase its internal rate of growth. Decreasing which one of the following will help the firm achieve i

IgorC [24]

Answer:

D) Dividend payout ratio

Explanation:

Internal Growth Rate of a firm is the maximum growth rate at which the firm can grow without involving external financing i.e. without assuming additional debt or equity infusion in the firm. At this level of growth the cash available from the operations can be used to fund the company.

It is calculated using the formula

IGR= ROA* b / (1-ROA * b)

where

IGR is the Internal Growth Rate

ROA is return on assets

b is the retention ratio or (1-dividend payout ratio)

To answer the question we look at each option

If ROA (Return on Asset) is decreased the numerator decreases and denominator increases in equation (1) and thus the Internal growth rate decreases, so ROA is not the answer

If Net Income is reduced the Return on Assets also falls thus as in the above case Internal growth Rate decreases

If retention ratio is reduced the numerator decreases and denominator increase leading to a fall in IGR

If dividend payout ratio is decreased the retention ratio increases leading to the increase in numerator and decrease in denomonator leading to an increase in the IGR. Thus Decreasing the dividend payout ratio will increase the IGR.

If Return on Equity is reduced i.e. indirectly Net Income is reduced for the same equity the similar effect as in part for Net Income and thus reduces the IGR.

So decreasing dividend payout ratio increases the interna growth rate of a firm

3 0

3 years ago

If a developing country wishes to attract mass tourism it must:

Blababa [14]

The correct answer is to provide numerous facilities based on the western standards of living. When a continuous developing country wishes to attract mass tourism, providing different facilities according to western standards boosts the chances of attracting more tourists, since tourists are easily attracted by western culture, because of their western setup or living.

4 0

4 years ago